RBI Fines Halol Urban Co-operative Bank Rs 2 Lakh For Non-Compliance

The Halol Urban Co-operative Bank, situated in Panchmahal, Gujarat, has recently faced a penalty of Rs 2 lakh from the Reserve Bank of India (RBI).

This penalty stems from the bank's failure to comply with various directives issued by the RBI, including those concerning 'Loans and Advances to directors, relatives, and associated firms,' 'Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs),' and '(Co-operative Banks - Interest Rate on Deposits) Directions, 2016.' Under the authority granted by Section 47A(1)(c), Sections 46(4)(i), and 56 of the Banking Regulation Act, 1949, the RBI imposed this penalty.

It's important to note that this penalty isn't a judgment on specific transactions or agreements made by the bank with its customers. Rather, it's a consequence of identified deficiencies in the bank's compliance with regulatory standards.

The penalty follows a comprehensive statutory inspection conducted by the RBI regarding the Halol Urban Co-operative Bank's financial status as of 31 March 2022. The examination revealed irregularities, such as granting a loan where a director's relative acted as a guarantor and breaching inter-bank exposure limits. The bank also failed to pay interest on matured term deposits promptly.

Upon receiving a notice from the RBI, the bank responded and presented its case during a personal hearing. Despite the bank's submissions, the RBI concluded that the charges of non-compliance were substantiated, resulting in the imposed penalty of Rs 2 lakh.

This regulatory action reaffirms the RBI's commitment to upholding integrity and regulatory compliance within the banking sector, ensuring a robust and compliant financial landscape for all stakeholders.

(ANI)